At the share price before the announcement, this would imply a DY of 4.7%. The ex-date is set for 29 April 2024, while the payment date is set for 24 May 2024. Furthermore, when the date of the current SBB program passes (18 November 2024), a new share buyback, in the period of 5 years will commence, which we will detail below. The announced strategic investment plan implies an increase in EBITDA to EUR 150m, from EUR 109m in 2023. The plans entail EUR 450m investments by 2026, with the biggest one being the continuation of premium hotel Pical 5* resort and investments in Rab 4/5* resort.
Yesterday, Valamar Riviera published a GSM call, which will be held on 24 April 2024. In the call, among other things, the Company also made a proposal for the distribution of profit. While the 2023 net profit will be transferred to retained earnings, a dividend payment in the amount of EUR 0.22 per share will be paid out from the retained earnings of the years 2016, 2019, and 2021. At the share price before the announcement, this would imply a DY of 4.7%.
The ex-date is set for 29 April 2024, while the payment date is set for 24 May 2024. Lastly, Valamar Riviera also noted in its dividend policy, that in the forthcoming period, the Company will aim for a DY of 4% compared to the average share price achieved in the last quarter of the previous year. More details regarding the Company’s dividend policy can be accessed here.
Valamar Riviera dividend per share (EUR*) % dividend yield (%) (2015 – 2024)
Source: Valamar Riviera, InterCapital Research
*DPS converted using the average yearly EUR/HRK exchange rate from the CNB
Regarding the share buyback program, Valamar Riviera has an active one already, which will end on 18 November 2024. Within the GSM call, the Company proposed that once that date passes, a new share buyback, for the period of 5 years will commence. In terms of conditions, the maximum amount of bought-back shares cannot exceed 10% of the share capital of the Company. The lowest price cannot be less than 50% of the average price in the 30 days preceding the day of the buyback of shares. In the same manner, the highest price cannot be 20% higher than the average price in the 30 days preceding the day of the buyback. Finally, the price of the buyback, measured by the EV/EBITDA indicator, can amount to 11x EBITDA at its maximum.
In regard to its development and investment strategy, Valamar Riviera noted that the SB adopted the Group’s business strategy until 2026. The strategy is based on the investment plan amounting to EUR 450m, aimed at building Pical and Rab premium resorts, raising the quality of hotels and campsites, internationalizing, and investing in socially responsible and sustainable tourism projects.
Valamar’s strategic goals include achieving double-digit business and company value growth based on the comparables multiples valuation approach. After implementing the strategic initiatives, the expected EBITDA will amount to EUR 150m, with an average annual earnings growth of 11% compared to 2022. The Company plans to increase revenue to EUR 500m, with 50% generated in shoulder seasons and as much as two-thirds of revenue coming from direct sales. The plan is to improve working conditions further, raise wages, focus on creating jobs with year-round income (over 50%), retain local employees (70%), and attract seasonal returnees (60%).
The new strategy focuses on holiday tourism, good for destinations, residents, guests, and employees while creating new value for investors. Valamar will continue to invest in sustainable tourism and socially responsible business.
Furthermore, the Company SB also gave final approval on the continuation of investment in Pical Resort 5*, Valamar Collection in Poreč, the largest investment in Croatian tourism, worth EUR 139m, as well as its consent regarding investment financing. The second strategic project in the first phase of Rab Resort 4/5* construction is Suha Punta, worth EUR 54m, approved by Imperial Riviera’s SB. Construction will begin this year, with a planned opening in the summer of 2025. More details are available in the Company’s announcement, which can be accessed here.
